Is it too early to Call It a Trend?

Earlier this week, the National Association of Realtors reported that in December, existing home sales rose unexpectedly while inventory declined.

The national real estate organization reported, “Existing home sales – including single-family, townhomes, condominiums and co-ops – jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December from a downwardly revised pace of 4.45 million units in November, but are 3.5 percent below the 4.91 million unit pace in December 2007.”

Total housing inventory at the end of December fell 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a 11.2-month supply in November.

Here at home, the sales news only gets better. Earlier this week, we released our December luxury home sales release—which was picked up by countless news media outlets:

http://www.wilmington.dbusinessnews.com/shownews.php?newsid=175342&type_news=past

http://www.dailycamera.com/news/2009/jan/26/boulder-real-estate-denver-area-luxury-home-sales/

Among the top findings in the report:

• A total of 48 properties sold for more than $1 million last month, up from 35 in November
• At the same time, the median price of million-dollar property sales fell to $1.23 million, down more than 17 percent from November and more than 8 percent from the previous year

As the report notes, over the past few months we have started to see a gradual turnaround in home sales in our region, and that’s encouraging for an ultimate rebound in the housing market. Much of the sales increase has been focused on the lower end of the market rather than the move-up and luxury housing market. We have to work through this process and it’s going to take time, but ultimately I think you’ll see every segment of the market benefiting.

So why the sudden, so drastic surge in sales? There are a few reasons:

• A lot of people who were previously priced out of the housing market can finally buy
• With interest rates under 5%, a buyer’s purchasing power is at its best in more than three decades
• After months of increasing or stable inventory, we are finally starting to see the numbers fall
• Increased consumer confidence (of late) based on the new administration
• We’re seeing a lot more investors coming into the market in addition to first time buyers

So is it too early to call it a trend? Probably. In all honestly, we still have a lot of distressed properties to move through before we can begin to see prices stabilize. At least for the foreseeable future, buyers will probably have the edge but with an 84.9 percent increase in sales year over year and inventories on the decline, we’re finally moving in the right direction. The key to all of this: buyers are ready to buy when they perceive a good value. Until then, they wait.

Conifer, Colorado Real Estate is up this week. If you are looking for Conifer, Pine, Bailey, Morrison or Evergreen Real Estate see us at www.Early-Group.com.